On Immigration’s Costs

by Ian Tingen

This post is mostly a public reminder to discuss the costs of immigration a bit more thoroughly at some point. The following (slightly edited) is from a discussion I had on Facebook with a friend while discussing this article about how disconnected politicians foist the costs of immigration on constituents who can do little about it.
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There are great economic benefits to immigration! The thing is, the analysis usually stops right at that broad point. It doesn’t talk about whose jobs are undercut (usually the working poor / working class service people), where the benefits aggregate (to the companies who hire the cheapest labor possible), and so on.

Example: an anecdote from the Arizona service industry. Back in the last construction boom in the late 90’s / early 00’s, lots of developments were going up in the Phoenix metro area, and especially in the land between Phoenix and Tucson. With all of these developments, tons of new air conditioning equipment needed to be installed. Lots of contracts went out to bid, and most of them were won by companies who many contractors knew hired lots of day laborers / used coyotes (illegal labor traffickers) to import labor. Lots of those laborers would work a day for wages equivalent to one hour of what you could get a US certified tech for. Even when you factor in a higher failure rate of equipment installed (and the warranty work that comes after), it was still cheaper to go with the non-US labor model.

A guy who’s working a legit two to five man shop can’t compete with that. This is not to say that it’s bad to hire day labor, but the people who are effectively cut out of that market have no voice.

Yes, it’s true that immigrants are great for economies, at least until they start demanding higher wages. The largest value of immigrant income is derived from exploiting their relief that’s derived from them leaving whatever shitty political / economic situation they find themselves in. You don’t see companies hiring them at rates competitive with native labor. Even then, with a limited amount of work available, it has to displace someone – often those who were already on the lowest end of the economic bracket, nationals of the country that the immigrants are coming to.

Of course, we don’t talk about this when outlining the benefits of open borders. I believe immigration can be a great social and economic booster to any country willing to engage in opening their borders, but we need to be realists: there are costs, too – and we need to be sure we engage the people bearing them.

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image from Hoffman Cooling, who I have no affiliation with 

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